The yellow metal (XAU / USD) rose to its highest level since early January at $1,890 on Wednesday. Later, we saw a correction to the 21 SMA around $1,860. At this time of writing, the price is bouncing above the Simple moving average, trading within the uptrend channel.
Gold appears to be regaining its traditional safe haven status, with XAU / USD retaining its bullish momentum. In view of the sharp decline in the cryptocurrency market, many investors have liquidated their positions and are looking for safe-haven assets such as the yen and gold.
In addition, the 10-year US Treasury yield remains under downward pressure and has provided an additional boost to gold. Gold is expected to break above the psychologist level of $ 1,900 in the medium term.
On the 4-hour chart, we notice that Gold is trading within an uptrend channel and above the 21 SMA which acts as dynamic support so that there could be upward momentum to the zone of resistance of $1,890.
The Eagle indicator is bouncing above the oversold zone, moving away from the 10 level and could continue with the bullish signal, and this would be reflected in the price of gold trading above $1,875, zone of 8/8 of murray and higher until reaching the next resistance at $1,900 (psychological level).
On the other hand, critical support is at $ 1,843 level of 7/8 of murray. A daily close below $1,858 could attract sellers and accelerate the decline to this support level. Therefore, you can sell below the SMA of 21 ($ 1,858).
The market sentiment report shows that there are 61.52% of traders who are selling Gold, which means that the uptrend could continue up to the $1,900 level. Therefore, every time gold falls back towards levels of support could be a good opportunity to buy.
Our recommendation is to buy above the 21 SMA or if gold makes a technical bounce to the uptrend channel line, it will be a good opportunity to buy with targets in $1,875 and $1,890.
Support and Resistance Levels for May 20 – 21, 2021
Resistance (3) 1,901
Resistance (2) 1,893
Resistance (1) 1,888
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Support (1) 1,869
Support (2) 1,856
Support (3) 1,850
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Trading tip for GOLD for May 20 - 21, 2021
Buy above 1,859 (SMA 21), with take profit at 1,875 (8/8), and 1,890, stop loss below 1,855.
